Production needed to reduce inflation, says head of Independent Industrialists' and Businessmen's Association

World Bulletin / News Desk

Boosting production in Turkey should help to bring down inflation, which in turn will reduce any risk from currency fluctuations, according to the head of one of the country's top business associations.

"It is necessary to increase efforts first of all to bring inflation under control," Abdurrahman Kaan, head of the Independent Industrialists' and Businessmen's Association (MUSIAD), told Anadolu Agency late Wednesday.

Kaan made the remarks on the sidelines of the Turkey-Africa Economic Forum in the central Turkish province of Konya, where more than 150 businesspeople and 33 ambassadors from African countries were attending to discuss Turkey's investment opportunities in Africa.

"Why does currency increase? Of course, it may be affected by the political context, but I want to stress that the fundamental reason is inflation.

"I think that Turkey needs to increase its production and while raising production, it will lower inflation, and then should gradually reduce the risk of rate," Kaan said.

On Tuesday, the U.S. dollar/Turkish lira rate saw its historic high versus last year’s average USD/TRY rate of 3.65 and 3.02 in 2016.

Kaan added the body expects that Turkey’s economy will grow around 6 percent in 2018.

He also said following the early elections scheduled for June 24, Turkey will increase its economic performance.

Consumer prices in Turkey rose 10.85 percent in April year-on-year, according to latest data from the Turkish Statistical Institute (TurkStat).

The Central Bank announced on April 30 that it raised Turkey's year-end inflation forecast from 7.9 percent to 8.4 percent under a tight monetary policy stance.

According to Turkey’s medium-term program introduced last September, inflation is targeted to converge to 5 percent through the end of 2020 by maintaining anti-inflationary monetary policy and fiscal discipline, "with the purpose of achieving high growth rates in the future, and increasing the quality of growth".